Roku has released its newest generation of media streamers, including the top-of-the-line Roku 2 XS player. Perhaps you haven't given Roku much thought as a serious addition to your home theater. Its earlier models gave more attention to the quantity of media-streaming partners than to the quality of the pictures they were streaming. The Roku 2 XS may change your mind as it changed mine.

Features
The Roku 2 XS has been completely redesigned from previous generations, shrinking to the size of a hockey puck. It looks so different, in fact, that the entire line of products has been dubbed "Roku 2." But what it lost in size, it more than gained in performance. It can stream 1080p video and pass 5.1 surround sound, and it performs beautifully.

While the Roku 2 XS is even smaller than the diminutive second-generation Apple TV, it offers a much wider variety of content. Currently, there are over 400 channels of content available for Roku boxes, as opposed to about 10 for Apple TV, though anything you can get on the iPad 2 or iPhone 4S—which is a lot—can be mirrored to the Apple TV.

For those who want access to TV shows and movies, Roku continues to carry most of the streaming sites you will probably want: Hulu Plus, Amazon Instant Video, Crackle, and, of course, the channel that made Roku famous—Netflix. In 2008, the Roku box was known as the "Netflix Player," the first device other than a computer that could directly stream Netflix from the Internet. However, Roku does not carry Vudu.

If you'd like to get premium cable programming along with other TV shows and movies, you can add the Epix or HBO Go channels. To view these channels, you must subscribe to them through your cable or satellite provider.

But just because you get the channels on cable doesn't mean you can watch on your Roku. While you may be able to watch HBO Go on your computer or mobile device, some cable providers limit access via Roku. For example, Comcast subscribers cannot view HBO GO content on the Roku. Check the HBO Go and Epix websites for a list of participating providers.

Aside from video channels, Roku offers many popular music-streaming services, including MOG, Pandora, and rdio; news channels such as CNET, CNBC, and Wall Street Journal; and photo-sharing sites, including Flickr, Picassa, and a channel to view photos and videos from your Facebook feed. Also, many popular podcasts can be found in the TWiT, Revision 3, and MediaFly channels. For sports fans, there are the popular sports channels like NHL Game Center, NBA, and MLS, as well as specific channels to help coach viewers on how to play football or baseball.

While some channels are mainstream, such as those showing Disney videos and one dedicated to The X Factor reality TV show, some of the top-rated channels feature special interests for different religions, cultures, hobbies, and sports. The Mormon Channel and EWTN (the Global Catholic Channel) are among the first listed in the Top Rated category of the Roku Channel Store.

Most channels are free to download, but some cost 99 cents or more. Games like Pac-Man run $4.99. Some channels are free to download but require additional monthly subscriptions. Netflix, Hulu, and MOG each cost about $8 per month. Note that these subscriptions are not limited to watching on your Roku box—you can also stream content to other devices like smartphones, tablets, and computers.

Roku adds new channels at a faster pace than many other network media player makers. The newest channels include some video-arcade games, such as Pac-Man and Galaga. In fact, the Roku 2 XS now comes with a redesigned gaming remote control, which I'll discuss shortly.

It was big news when Roku partnered with Rovio to bring Angry Birds to the Roku box, where it can be played on a big-screen TV. While the Xbox 360, PS3, and Wii game consoles are adding more and more media streaming, the media-streaming Roku is now adding video games—albeit a simple game played on most computers and mobile devices.

The smaller case of the Roku 2 XS means that some connections found on the earlier XDS, such as component video and optical digital audio, had to be omitted. This new top-of-the-line model has only an HDMI output, an Ethernet port (not included on other new Roku models, which rely on WiFi), and a mini-jack that can be used with the included composite-plus-stereo-audio breakout cable.

The mini-jack makes it possible to connect older, standard-definition TVs that don't have HDMI inputs but do have composite-video and L/R analog audio inputs. Several of Roku's competitors, such as Apple TV and LG Smart Upgrader, only have an HDMI output and can connect only to HDTVs with HDMI inputs.

Interestingly, the other models in the Roku 2 line do not include an Ethernet port, relying entirely on WiFi to connect to the Internet. Still, you may want to use a wired Ethernet connection, since this is often reliably faster than WiFi, resulting in less buffering and the best video performance.

Like the earlier Roku XDS, the Roku 2 XS has a USB port, which offers the only way to stream your own media directly. The XS is not a DLNA-certified player and cannot find media saved to computers or media servers on your home network. Instead, you must copy the movies, music, or photos to a hard drive or flash drive that you can then connect to the Roku 2 XS.

To play media from a connected USB drive, you must first download and install the USB channel from the Photos and Videos category in the Roku Channel Store. The Roku 2 XS is compatible with very few file formats—MPEG4 (H.264) and Matroska (.mkv) video (the latter added just this week with a firmware update) as well as JPG and PNG photos (no GIFs). If you download other high-definition video formats like AVI, you will need to use transcoding software such as Handbrake, Xilisoft, or Air Video on your computer to convert it to a compatible format. For Mac users, note that the Roku 2 will only accept USB drives that are PC formatted—FAT16, FAT32, HFS+, or NTFS. You can download software for your Mac that can read and create NTFS-formatted drives.

The connection panel also includes a MicroSD card slot, but this is only for additional channel and game storage. No media content can be played from a MicroSD card.

Ergonomics
The new remote uses Bluetooth to communicate with the Roku box. Previous models' remotes used infrared (IR) and required a clear line of sight, and they were sometimes unresponsive even when pointed straight at the box. Because it uses Bluetooth, the remote is more accurate and doesn't require the box to "see" the remote, which means you can hide the box behind a TV or in a cabinet.

When I connected a mac formatted external drive, there is this error message. Yes, the extended OS X format should be HFS +, but the bottom line is that the Roku 2 wouldn't read any of my Mac formatted drives.

The Roku will NOT pass 1080P through my brand new Pioneer receiver. 720P works OK. Roku tech support agrees that it isn't compatible with all receivers, and states that I will have to bypass the receiver and connect directly to the TV. I would only have 2-channel audio if I did this since the Roku doesn't have digital audio out. A lousy solution!

I have ordered a new 59" Samsung Plasma that has a Netflix app (and other apps). What is the difference in sound and picture when using the Samsung app vs the Roku (or Apple TV)?

Also I read Stanman's comment re incompatibility of his new Pioneer AV Receiver and receiving 1080p. It gives me concerns since I just ordered a new NAD M15HD2 and will have to wait and see if there is a similar issue.
Fred

When it comes to picture and sound quality of an external streamer like Roku 2 or the Apple TV versus an internal Smart TV app, I have been hard pressed to notice a difference. As long as the HDMI cable is decent, the quality of the Roku 2, and especially the Apple TV are both excellent.
The benefit of the Roku 2 is that it is easy to use and there is a good variety of channels...then again, apps are being added to Samsung Smart TVs at a fast rate. The benefits of the Apple TV include iTunes content and access to your photos using PhotoStream, and airplay or mirroring from you iPhone and iPad.
There are other factors to consider when choosing a media streamer vs. a smart TV, most notably access to the content you want to watch.

As a long time Roku user I was excited to get the new Roku 2. Local content was and is still available by plugging a USB drive or a hard disk drive with it's own power supply into the USB port.
I've successfully played back HD 720p mkv files using a flash drive.
***There is a wonderful media streamer for videos called PLEX. You need to download the application from Plex and install it on your computer. Then you need to add files from your computer to the Plex media manager. All of this is pretty easy. Then add the private PLEX channel to your Roku account from your computer. Now you can stream both avi and mkv files directly from your computer which acts as a server and the Roku acts as a client. (Note: Roku allows users to install what are called private channels which aren't supported by Roku but are usually perfectly functional.)http://elan.plexapp.com/2011/05/03/plex-on-the-roku/

***To playback music files (which isn't currently possible with the PLEX server) you need to add the app called MainSqueeze. Again like the PLEX server, you need to download and install server software. MainSqueeze uses the Logitech Media Server. Then add the private channel MAINSQUEEZE to your Roku account.http://roku.permanence.com/

This may seem like a lot of effort but it can be set up fairly easily if you have some computer knowledge; no more knowledge is required than any other media streamer. The benefits of using the Roku as a content streamer make it worth the effort to add local streaming if that is important to you. I've recently tried both the WDTV live and the Sony SMP-N200 and both had many issues that will probably never be solved. Roku's open SDK (software development kit) means many developers are working on the player. Some who developed great apps were eventually hired by Roku. That's how a forward thinking company should work.

It's great that you've been able to play mkv files and that you like using Plex. It's getting better, but it's not 100% for me and I find other solutions better for streaming. I had great luck with the Sony.
I'd love to hear other solutions you find...